KIRPAL

Gift Tax Act, 1958: Sections 2(xii), 4(1) (c) and (d)-Gift of immovable property by unregistered document-Held, for a valid gift under Section 2 (xii) and (4) compliance with the provisions of Transfer of property Act and Registration Act necessarv- transfer of Properly Act, 1882-Sections 122 and 123-Registration Act, 1908- Sections 17. Words & Phrases . “Gift”-Meaning of in the context of Section 2(xii) of Gift Tax Act, 1958 and Section 122 of the Transfer of Property Act, 1882. Respondent, by an unregistered declaration sought to make a gift of certain immovable property to his wife. The Gift Tax Officer held that no valid gift had been made by respondent since the provisions of Section 123 of the Transfer of Property Act, 1882 had not been complied with. The said Findings were affirmed by the Assistant Commissioner and the Tribunal. However, on reference, the High Court observed that the definition of the word ‘gift’ under the Gift Tux Act, 1958 was wider than the definition of ‘gift’ in the Transfer of Property Act, and held that registration of document was not necessary for a valid gilt under Section 4 of the Act. Hence the present appeal by Revenue. -Allowing the appeal, the Court HELD : 1.1. High court erred in coming to the conclusion that the case fell within the provisions of Section 4 of the Gift Tax Act, 1958 and, therefore, as it was a deemed gift it was not necessary that the document had to be registered. [619-H; 620-A] 1.2. There can be no doubt that certain transactions may not be regarded as a gift for the purposes of the Transfer of Property Act but would fall within the ambit of the expression ‘gift’ by virtue of Section 4 of the Gift Tax Act, but in each one of the cases which in certain circumstances is to be regarded as a gift under Section 4 there has to be a transfer of immovable property and a transfer by reason of Section 17 of the Registration Act can only be by way of a registered document. Surrender or forfeiture of an interest in immovable property as contemplated by Section 4(1) (c) or vesting of any property in another person as contemplated by Section 4(1) (d) in the case of an immovable property would also attract the provisions of Section 17 of the Registration Act. [618-G-H; 619-A, B, C] 1.3. In order that there could be a transfer of property by way of gift as contemplated by the Transfer of Property Act, there has to be a registered document if the property sought to be transferred is immovable. The general law did not stand abrogated and the requirement of complying with the provisions of the Transfer of Property Act and the Registration Act had to be fulfilled. [617-F, 619-G-H] Commissioner of Gift Tax, Kerala v. R. Valsala Amma, 82 ITR 828 (SC), relied on. Smt. Padma Lalchand Mirchandani v. Commissioner of Income Tax, New Delhi, 128 ITR 174 (Delhi); Commissioner of Gift-tax, Bombay III v. Matilda Ferreira, 112 ITR 934 (Bombay); K. Madhavakrishnan v. Commissioner of Gift- tax, Tamil Nadu, 124 ITR 233 (Madras) and Darbar Shivrajkumar v. Commissioner of Gift-tax, Gujarat-IV, 131 ITR 647 (Gujarat), approved. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6725 of 1994. From the Judgment and Order dated 12.2.1985 of the Rajasthan High Court in Income Tax Ref. No. 27/75. B.B. Ahuja, K.C, Kaushik, Rajiv Tyagi, R.R. Dwivedi and B.V. Balram Das for Ms. Sushma Suri for the Appellant. N.M. Ranka, Sushil Kumar Jain and Raj Kumar Yadav for the Respondent.

CASE NO.: Appeal (civil) 6725 of 1994 PETITIONER: COMMISSIONS OF INCOME TAX, JAIPUR RESPONDENT: SIKBHMAL NAWALAKHA DATE OF JUDGMENT: 16/08/2001 BENCH: B.N. KIRPAL & SHIVRAJ V. PATIL JUDGMENT: JUDGMENT 2001 Supp(1) SCR 615 The Judgment of the Court was delivered by KIRPAL, J. The respondent was the owner of immovable property and by declaration dated … Continue reading →